EU probes Germany's energy discounts for industry

The European Commission formally launched an investigation Wednesday to find out whether energy price cuts granted to industrial clients in Germany is a hidden form of state aid.

Large electricity consumers were exempt from paying around €300 million ($390 million) in network charges last year alone — an arrangement that may put competitors in other member states at a disadvantage, said the Commission, which is also the 27-nation bloc's antitrust watchdog.

Germany exempted its industry from the charge to keep rising electricity costs in check as the country switches from nuclear power to renewable energies over the next nine years. Industry lobbies complained the country's rising energy costs would undermine competitiveness.

The charge is rolled over to small German electricity consumers who pay more because of the industry exemption. A similar scheme also exempts industrial consumers in Germany from a surcharge financing the expansion of renewable energies, which has sharply risen over the past years as the share of wind, solar and biomass power topped 25 percent of the country's electricity production.

In Berlin, Economy Ministry spokesman Holger Schlienkamp argued the reduction does not constitute state aid because it is financed not by public money but by a fee for all energy users. He also noted that the government is currently reworking details of the exemption.